China's Cindat Is Said to Join $660 Million QHotels Purchase

Updated on
  • Cindat negotiating joint purchase with U.K. investor Aprirose
  • Bain Capital, Canyon Partners selling four-star hotel group

China’s Cindat Capital Management is joining an acquisition of QHotels Group valuing the U.K. hospitality company at more than 500 million pounds ($660 million), people with knowledge of the matter said.

Cindat, which focuses on overseas property deals, is negotiating a joint purchase of QHotels with U.K. investment firm Aprirose, according to the people, who asked not to be identified because the information is private. Aprirose, which was previously pursuing the acquisition on its own, now plans to take a 50 percent stake in QHotels while Beijing-based Cindat would hold the remainder, the people said.

The suitors aim to reach an agreement with QHotels’s owners, Bain Capital Credit and Canyon Partners, in the next few weeks, one of the people said. QHotels runs four-star hotels catering to golf weekends and spa retreats, as well as accommodations for weddings and conferences. 

QHotels, founded in 2003, has a portfolio of 26 hotel properties across the U.K., according to its website. Bain Capital Credit and Canyon Partners invested in QHotels in 2014, when they bought a portfolio of QHotels loans during Irish Bank Resolution Corp.’s liquidation proceedings.

Dealmaking Restrictions

Representatives for Aprirose, Bain and Canyon Partners declined to comment. An official in Cindat’s Beijing headquarters said she couldn’t provide an immediate comment.

Hotel acquisitions by Chinese companies have become more sensitive since the government formally laid down new rules on overseas investments last month. China said it will restrict foreign dealmaking in areas including property, film and sports while encouraging deals in areas like agriculture and oil exploration. 

Any deal would add to the $4.2 billion in hotel acquisitions by Chinese buyers this year, more than double the volume during the same period in 2016, data compiled by Bloomberg show. No final decisions have been made, and there’s no certainty the discussions will lead to a transaction, the people with knowledge of the matter said. 

Cindat, backed by China Cinda Asset Management Co., agreed to buy 70 percent of seven Manhattan hotels from Hersha Hospitality Trust for $571 million last year. It plans to diversify into warehouses and student housing in developed markets like the U.S., the U.K. and Australia, Chief Executive Officer Greg Peng said in a March interview.

— With assistance by Sarah Syed

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